Grassroot level institutions are formed which are owned and
managed by the women. The major activities of these institutions
are mobilisation of savings from the members and lending to
address their consumption and production needs and undertaking
need based developmental activities. All the groups open accounts
with the banks.To sustain the grassroot institutions, federations
of such groups are formed which enables allocation of resources
to the groups as per their needs, monitoring their activities.
The structures in place are sangams at the village/hamlet level,
mahasabhai at the cluster level and Area level Trust at the
block level.
Sangam Formation
Backward panchayats are identified by secondary
data and through interaction with people. Villages that have
a high concentration of poor Dalits are chosen. The idea of
group formation and the activities of the groups are discussed
among the village women and usually within a period of two to
four months the women self select the members and form a group.
The following are some of the good practices
in group formation and nurturing:
1. Small and homogenous groups with
similar socio economic background are formed. Dalits are organised
into separate groups since casteism is a major constraint
in village group cohesion. The group size is between 11 to
20 since a smaller group is unable to withstand the pressures
of external environment.
2. Participatory formulation of the rules and regulations.
Detailed rules/bye laws relating to the financial aspects
of the group have been developed over a period of time. Individual
groups discuss these rules at length and modify them according
to their requirements.
3. Capacity building in decision making. Potential
conflicts and difficult situations in the functioning of a
group are described and the groups are asked to discuss the
ways and means to be adopted to deal with such situations.
When the groups discuss the same, they are enabled to work
out strategies to cope with conflicts as also difficult decision
making situations. Addressing conflicts openly, in a non-threatening
manner leads to organisation building.
4. Leadership. Different members from the group are
elected as leaders by rotation every month . Their responsibilities
are conducting the meeting, collection of savings, loan repayments
and interest, disbursal of credit and depositing the balance
cash in the bank. Thus each member is equipped to handle the
cash and deal with the bank.
5. Transparency of transactions. All money transactions
- Savings, loans, and setting aside funds for expenses and
loan repayments to banks - are carried out during the group
meetings. Cash payments and receipts are made in the presence
of all members ensuring transparency. Members handle all the
cash. Decisions on loans are similarly made.
Features
of the grass-root level institutions
Particulars
Sangam ( self help groups)
Cluster Level Federations
Area level Trust
Area of operation
Hamlet / village
Cluster of villages in a Panchayat
union.
One Panchayat Union / few unions
Particulars
Sangam ( self help groups)
Cluster Level Federations
Area level Trust
Members
Poor women
numbering 10 to 20 who self select each other.
Sangams, which are six months old. Represented by two
leaders and who attends all the meetings for a year
and the other monthly meetings. The leaders apprise
their members of the developments in the federation
meeting.
Sangams (up to 150 in number)(Represented
by the three leaders of each cluster level federations
Activities
Micro Credit
· Mobilisation of savings.
· Lending to members for consumption and production
· Accessing credit from external institutions
for resource support.
· Book Keeping- the members also maintain records
for the transaction of the sangam.
Developmental activities.
· Identifying the requirements of village and
arranging for them.
· Village level requirements such as street lights,
drinking
water etc.
·
Credit requirements of groups.
· Review of recovery position of the groups.
· Review of the work of the supervisory committee
set up for ascertaining credit utilisation at the group
level.
· Developmental activities.
· Rallying for social causes· Area level
requirements such as street lights, drinking water etc
· Discussion on projects to
be taken up in the villages.
· Policy Formulation for resource allocation
to the groups.
· Review of working of supervisory committees.·
Review of over dues.
· Assessment of Training needs of groups.
· Participating in panchayat level developmental
activities.
· Rallying for social issues
Particulars
Sangam ( self help groups)
Cluster Level Federations
Area level Trust
Sources
of income
Interest
earned out of loans to members,Fines collected andDonations
if anySupport fromLEADFacilitate the groups norms for
group function and savings and credit management
Entrance fee from each Sangam.Monthly fees by each sangam.
Contribution by each member for social security fund,
which is rotated as loans and interest, earned.Contribution
by each sangam towards risk fund, which is rotated as
a loan and interest, earned.Service charge from sangams.Part
of the income earned as interest. Operationalisation of
the cluster level federation is on the process towards
sustainability.
Housing
grant / credit received from different agencies by LEAD
given as a grant to the Trust. The Trust lends the amount
to the members and earns interest. Since the system is
yet to stabilise LEAD staff manage the housing loans.Monthly
Membership fee from each federation.Operationalisation
of the area level federation is on the process towards
sustainability
Supervision
LEAD staff attends each meeting. They write the books
of accounts.They help in collecting overdue loans if
the group has failed in its efforts by giving gentle
pressure
LEAD
staff attends the meetings and maintains the books.They
help in conducting the meeting by setting the agenda and
leading the discussions.
LEAD staff including the Executive
Director attends the meeting.
Present system of Monitoring / MIS of the Sangams:
The management information system of each of the tier has
been designed keeping in view the nature of work of the grass
root organisation and the level of monitoring required. The
system has been devised to ensure accountability, reliability
and easy decision making. The area level trust and clusteral
level federations are not financia
intermediaries at present. Hence the discussion in this paper
pertains to the groups and LEAD as an organisation.
Group level:
The groups are the primary organisation through which all
the credit activities are undertaken. The major activities
undertaken are the savings collection from members and lending
among the members by borrowing from banks and other institutions,
participating in the insurance scheme of LEAD (wherever applicable)
and the village level common activities. The information system
has been designed to collect data on the various activities
of the group.
MIS at the group level
Level of data collection
Nature of data
Data maintained in
Use of data
Periodicity of collection
Individual
Base line data covering
AgeMarital status
Number of family membersHousing statusNature of occupation
of Self and spouseLiteracy levelIncome of the familyHousehold
assetsAny special skills
To monitor periodically the improvement
in the socio economic status of the familyTo verify
the status of the families joining the groups (poor
or poorer or poorest
At the time of forming the group.The
data is updated every six months and whenever an evaluation
is to be undertaken
Group level
SavingsIndividual
savings - monthly and cumulativeGroup savings - Monthly
and cumulative
Growth in savings
of the individual and group.Basis for the banks to sanction
the loans to the groups
Every month
Lending
Individual loan
details
-Amount of loan, purpose of loan, number of loan installments,
Repaymentsand overdues. (to be maintained for each)
Loan registerLoan
receipt
To monitorPurposes for which loans
are made.Loan repayments.
Level of data collection
Nature of data
Data maintained in
Use of data
Periodicity of collection
source of loan such as group and bank
loan and other loans. Group level -Bank loan availed
and repayments made.
Social activities
Minutes book
To measure the
interest of the group in addressing the issues of the
village.
Monthly
Basic group strength
Attendance register, savings and loan
ledger
Regularity and discipline of the members
Monthly
The books of accounts maintained for each group is the basis
of data collection for the group activities. Each staff member
is in charge of a fixed number of groups. The staff at each
field office maintains the books of the groups. LEAD has developed
control statements to be prepared by each of the staff in
each of the field office. The consolidation of the data is
done manually at the field office and sent to Head Office
where the data is computerised and consolidated progress reports
are made for each month.
While a reporting system brings in the
data required, it is too mechanical to assess the quality
dimensions of performance. For this purpose LEAD supplements
the MIS based monitoring with field visits to the groups at
their site. The Project Officer in the Field office undertakes
such field visits regularly. Moreover the problematic groups
are also visited for finding solutions. The following aspects
are looked into at the time of monitoring of the groups.
Qualitative indicators for group functioning
INDICATOR
QUALITY DIMENSION
Member attendance in the meetings
Are borrowers attending
Agenda of
meetings
Inclusion
of delicate issues like default by members in repayment,
savings, attendance, etc.
Regularity
in savings
Do savings
continue after obtaining loan
Loaning
performance
Is there
equitable coverage of membersIs there a shift from consumption
to productive purposes
Recovery
performance
Number of
defaulting members.Is default wilful
Transparency
of cash dealings
Are there
transactions outside the meeting
Adherence
to rules and discipline
Enforcement
of penalties
Decision
making process
Is it collective,
are all opinions heard?
Economic capacity building
Is there a skill / resource development
plan for providing incomes to members.
Confidence level
Ability to interact with other agencies,
Resolve to stand for their rights.
Social relevance
Community development activities,
support for social causes
The groups' progress is watched periodically
to see the trend in functioning. Any lapse and negative feature
observed in their functioning are brought to the notice of the
groups for necessary corrective measures . However, when the
groups increase in number sizeably, it is advisable to draw
out a sample and collect information since it is too expensive
to collect data for all the groups and analyse them.
Project Level
The data and information collected can be broadly categorised
as under:
Monthly progress reports
LEAD collects information from each field unit
which in turn collect the information from each sector and
each member of team. Thus information in the field is available
for the sangams managed by each of the staff. At the project
level the field unit wise data is computerised and analysed.
Expenditure and income of the various programmes and audited
balance sheet LEAD has maintained programme wise expenditure
and income accounts which are utilised for internal review,
submitting the reports to the donors and preparation of annual
reports. These are not discussed in detail since they pertain
to activities other than micro finance.
Special reports on any problem area or other
area of interest
Apart from regular information about the performance of the
groups LEAD collects information on any potential problem
areas. For example, in the phase of expansion the management
of LEAD noticed a disturbing trend from the progress report.
The number of groups was not crossing 400 for some months
though the staff had been advised to form more groups of interested
villagers. There was group formation happening on one side
and groups disintegrating on the other. A comprehensive study
was made and corrective measures were taken. Psychological
resistance of some staff for expansion and apprehension to
face the challenges were dealt with. The problems of the groups
were addressed and steps were taken to revive the good groups.
